WS #3766

The dominant signal in this 10-minute window is the escalating Iran-Israel conflict, which is directly impacting energy markets and broader geopolitical stability. Bloomberg reports that Iran's grip on the Strait of Hormuz is tighter than ever after a month of war, corroborating earlier warnings of severe supply disruptions. Concurrently, Iranian ballistic missile debris impacted near the Haifa refinery in northern Israel, a critical energy infrastructure target, while attacks continue to push oil prices above $90. This is compounded by Spain closing its airspace to Iran War-related aircraft and barring use of its Rota and Morón air bases, forcing the U.S. to cancel plans to deploy B-52 and B-1 bombers, indicating NATO fragmentation and reduced military options. Secondary signals include Ukraine-Russia developments that could affect energy supplies. Ukrainian President Zelenskyy stated that Ukraine has received signals from allies to scale back attacks on Russia's oil infrastructure, with Reuters corroboration across multiple sources. This could ease some supply pressures if reciprocated, but Russian forces also took control of Luhivske in eastern Ukraine, per the Russian Defence Ministry, suggesting ongoing conflict. Additionally, aluminum prices surged 6% on the LME after Iranian attacks hit major Middle East producers, highlighting spillover effects into industrial commodities. Market sentiment is mixed, with Morgan Stanley's Wilson noting the S&P 500 correction nears end stage, and Bill Ackman describing the Middle East conflict as one-sided and bullish for equities, urging investors to buy quality companies at low prices. However, German inflation is headed for its highest in over a year due to energy prices, per Bloomberg, reinforcing stagflation fears. These developments are likely to keep energy stocks volatile and pressure broader indices like SPY and QQQ in the near term.